Automotive products designs and produces automotive parts

Required:

1.Compute the manufacturing overhead allocated to each customer in 2014 using the simple costing system that uses machine-hours as the allocation base.

5-1

5-22 Plant-wide, department, and activity-cost rates. Triumph Trophies makes trophies and plaques and operates at capacity. Triumph does large custom orders, such as the participant trophies for the Minnetonka Little League. The controller has asked you to compare plant-wide, department, and activity-based cost allocation.

Other information follows:
Setup costs in each department vary with the number of batches processed in each department.

Supervision costs in each department vary with direct manufacturing labor costs in each department.

4.Explain how the disaggregation of information could improve or reduce decision quality.

5-2

3.Explain how the disaggregation of information could be helpful to VDRC’s intention to continuously improve its services.

5-3